Tata Motors-Fiat JV to invest Rs 2,341 cr in Pune facility
The Economic Times — March 25, 2008

TFiat India Automobiles (FIAPL), a 50:50 joint venture between Fiat Group Automobiles SpA and Tata Motors, has rolled out plans for expanding production capacity and backward integration at its Ranjangaon facility in Pune district.

FIAPL on Monday signed an MoU with the Maharashtra government for an additional investment of Rs 2,341 crore under the expansion plan.

This takes the total investment by FIAPL at the Ranjangaon plant to Rs 4,020 crore. With this, the total committed investments that the state has fetched in the past two years comes to Rs 1,19,000 crore in 95 mega projects, chief minister Vilasrao Deshmukh told media persons at the MoU-signing ceremony.

Monday's MoU will be a boost to FIAPL's plan to launch two B and C segment cars - Grande Punto and Linea - which would roll out from the Ranjangaon plant later this year, said CEO Rajeev Kapoor. By 2012, the capacity of the plant would be expanded to two lakh cars, three lakh diesel engines, and three lakh spare parts and accessories per annum, Mr Kapoor added. At present, the plant has a capacity to produce one lakh cars and two lakh engines.

In addition to premium cars, the plant would also manufacture Fiat's successful 1.3 litre multijet diesel engines and 1.2 & 1.4 litre fire gasoline engine and the C549 transmission ones. Apart from Fiat cars, the facility would also produce Tata passenger and next generation cars.

Tata Motors managing director and FIAPL chairman Ravi Kant, however, told media persons that FIAPL did not have any plan to use the expanded Ranjangaon facility to manufacture Tata's Rs 1-lakh car, the Nano.

Asked about the severe energy crisis in Maharashtra, Mr Kapoor said the state government had assured uninterrupted power supply to the plant. Principal secretary (industries) VK Jairath added that the plant would be supplied uninterrupted power from a separate industrial feeder.

The Ranjangaon facility employs about 850 people and the capacity expansion is expected to create another 1,000 direct jobs. The overall employment potential of the plant, at its maximum capacity, has been pegged at 4,000 direct and indirect jobs.

The Fiat Group-Tata Motors JV was incorporated in January 1997. The board of directors for this company comprises five nominees each from Fiat and Tata.